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California Company Fined $4.1 Million for Exports Destined to Iran

Thursday, July 31, 2014
Sandler, Travis & Rosenberg Trade Report

The Treasury Department’s Office of Foreign Assets Control has assessed a $4.1 million penalty against a California company for issuing 39 invoices for car audio and video equipment that was shipped to a company that reexports most, if not all, of its products to Iran. OFAC states that the company knew or had reason to know that these goods were intended specifically for supply, transshipment or reexportation, directly or indirectly, to Iran, noting that five of the invoices were issued after the company received a cautionary letter from OFAC in January 2012.

The settlement amount reflects OFAC’s consideration of the following facts and circumstances: (1) the company demonstrated reckless disregard for U.S. sanctions requirements; (2) it appears that the company attempted to hide or purposely obfuscate its sales to Iran when it changed a Web site to remove a photo gallery of its products that was labeled “Iran;” (3) the alleged violations constituted or resulted in a systematic pattern of conduct; (4) the company had no compliance program at the time of the alleged violations; and (5) the company attempted to mislead OFAC by providing false information in its subpoena responses and other letters. On the other hand, the company had not received a penalty notice or finding of violation in the five years preceding the transactions that gave rise to the alleged violations, is a small business, and provided some cooperation to OFAC.

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